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DisplayDisplayComponentsComponents
Philippe CombesPhilippe CombesExecutive Vice President Philips ComponentsExecutive Vice President Philips Components
CEO Business Group Display ComponentsCEO Business Group Display Components
We will reinforce our leading position
and grasp high growth and high
value added business opportunities!
• We are number 1 in color picture tubes
• We have the power of innovation
• The Plasma market offers bright perspectives
• We constantly drive towards cost leadership
• We deliver high customer service
• We focus on fast growing segments
Display Components - the Key MessagesDisplay Components - the Key Messages
Television TubesTelevision Tubes
Plasma Display Panels (PDP)Plasma Display Panels (PDP)
Monitor TubesMonitor Tubes
It’s great to be a leader in display!It’s great to be a leader in display!
ContentsContents
• Market Overview
• Current position
• Our future strategy– Cathode Ray Tube (CRT)– Plasma Display Panels (PDP)
• Summary
0
50
100
150
200
250
300
350
400
450
1999 2000 2001 2002 2003 2004
CRTCRT
Display Market14” - 40” [mill units]
Plasma &Projection <40”
Plasma &Plasma &Projection <40”Projection <40”
Desktop LCDDesktop LCDDesktop LCD
NotebookNotebookNotebook
CRTMonitor Market
CRTCRTMonitor MarketMonitor Market
CRT Television Market
CRT CRT Television MarketTelevision Market
an exciting technology, capturing the high volume of the marketan exciting technology, capturing the high volume of the market
CRTCRT
CRT will remain a tough competitor for new technologies
Source: Philips BI
2004
Volume Value
9%9%
36%
35%35%
20%20%
29%29%
43%
20%20%
8%8%0
50
100
150
200
1999 2000 2001 2002 2003 2004
30”-40”
Global TV CRT market
Millionunits
Jumbo
Small
Medium
Large
In TV tubes, the Jumbo segment is the fastest growingIn TV tubes, the Jumbo segment is the fastest growing
TV tube market developmentsTV tube market developments
• The television tube market is growing with an average of 4.8 %CAGR 2000-2004 in value
– The Jumbo segment has the strongest value growth ( > 14%).
• Innovation rate will increase to satisfy consumer trends triggeredby alternative technologies (flat, slim, high resolution).
• Main growth areas are China and Europe
• Supply demand is becoming balanced in all segments
• Allowing prices for small and medium size tubes to increase,restoring attractiveness to this segment
Source: Philips BI
In Monitor tubes, 17” will be the dominant sizeIn Monitor tubes, 17” will be the dominant size
0
50
100
150
200
1999 2000 2001 2002 2003 2004
>20">20"
19"19"
17"17"
15"15"
14"14"
Millionunits
Global monitor CRT market
Monitor tube market developmentsMonitor tube market developments
• PC market showing continuous volume growth of more than 10%per year
• The trend is large, slim and flat !
• Color CRT monitors continue to dominate the desktop display market
• China will be the largest market for Monitor CRTs
• Supply-demand getting in balance in 2002, one year earlier thanpreviously forecasted. Allowing for prices to recover
• Due to the penetration of LCD, the monitor tube market is expectedto reach its peak around 2006 / 2007
ContentsContents
• Market Overview
• Current position
• Our future strategy– Cathode Ray Tube (CRT)– Plasma Display Panels (PDP)
• Summary
Nr 1 in television CRTs (18% World Wide)
Nr 5 in monitor CRTs (9% World Wide)
0%
5%
10%
15%
20%
PhilipsThomson
SonyMatsushita
Samsung LG0%
5%
10%
15%
20%
Samsung
CPT
LG
Sony
Philips
Hitachi
Mar
ket s
hare
(va
lue)
Source: Philips BI
We are the leader in TV tubes!We are the leader in TV tubes!
Our customers include the world’s market- and innovation-leadersOur customers include the world’s market- and innovation-leaders
The 2000 European TV of the Year is usingThe 2000 European TV of the Year is using Cybertube Cybertube
EuropeAmericasAmericas
AsiaAsia
20002000
19951995
EuropeAmericasAmericas
AsiaAsia
Our global presence is uniquely balanced!Our global presence is uniquely balanced!
This is supported by our local industrial base.
We have been able to manage strong price decreasesWe have been able to manage strong price decreases
Index
50
60
70
80
90
100
110
1996 1997 1998 1999 2000
Price
Cost
TV tube 14 inch
ContentsContents
• Market Overview
• Current position
• Our future strategy– Cathode Ray Tube (CRT)– Plasma Display Panels (PDP)
• Summary
We will grasp high growth and high value addedWe will grasp high growth and high value addedbusiness opportunities in our display marketbusiness opportunities in our display market
Focus on
– Winning customers through innovation andcustomer intimacy
– High growth segments: Jumbo expansion
– Cost competitiveness
0
1
2
3
4
5
6
1997 1998 1999 2000 2001 2002 2003 20040
20
40
60
80
100
120
140
1997 1998 1999 2000 2001 2002 2003 20040.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
R&D in mill Euro
CRT Sales CRT R&D spending
Sal
es [
B E
uro
]
R&
D s
pen
din
g [
Mill
Eu
ro]
R&
D s
pen
din
g [
% o
f sa
les]
Our sales growth is built on our R&D investmentsOur sales growth is built on our R&D investments
R&D percentage of sales
To grow, we focus on big, flat, slim and high resolutionTo grow, we focus on big, flat, slim and high resolution
Our flat solution allows for fast and cheap implementation!
Rolling out our unique flat technology - Rolling out our unique flat technology - CybertubeCybertube
Sony WegaPhilips
Picture Flatness Impression
DepthAll competitors at similar depth
Drop Test (neck down)AG gives betterperformance but others areat threshold level for RF
Drop Test (E/W)AG gives worse performance
MicrophonyGPM technology provides bestin class performance due tostrength of shadow mask
Magnetic Shielding
WeightLowest weight due tomedium glass wedge&CHSC
Off-state flatnessimpression
++
+
0
-
--
Using e-tools to optimize our supply chain and customer intimacyUsing e-tools to optimize our supply chain and customer intimacy
• Electronic Key Account Management (ek@m TM)– Customer intimacy– Supply chain integration– Quality excellence
• eProcurement– B2B integration for strategic bill of materials– eCo-design with key suppliers– Ariba implementation for non product related purchases
We capture the growth in jumboWe capture the growth in jumbo
Taiwan
USA
Brazil
W-Europe
by investing in cost competitive locations
China2 lines
Central-Europe3 lines
Mexico2 lines
CRT site where lines will be addedOther CRT sites
Jumbo salesJumbo sales
20002000 20042004
24% market share in jumbo TV tubes by 2004 (value)24% market share in jumbo TV tubes by 2004 (value)
smallsmall
mediummedium
largelargejumbojumbo
smallsmall
mediummedium
largelargejumbojumbo
Revenues per SegmentRevenues per Segment
Central-Europe
USA
Brazil
Mexico
ChinaW-Europe
CRT sites
5 lines‘00-’02 5 lines
‘00-’011 line‘00-’01
We have accelerated our restructuring effortWe have accelerated our restructuring effort
Taiwan
Moving large and jumbo to future customer locations
ContentsContents
• Market Overview
• Current position
• Our future strategy– Cathode Ray Tube (CRT)– Plasma Display Panels (PDP)
• Summary
Plasma is a consumer dream come truePlasma is a consumer dream come true
“A picture on the wall”
0
1
2
3
4
5
6
7
8
9
1998 2000 2002 2004 2006 2008
PDP Market[mill units]
Source: Philips BI
A promising technology with high growth potentialA promising technology with high growth potential
PDP market developmentsPDP market developments
• The 1999 biggest markets are Europe and North America
• At current price levels the main market is businessapplication
• Market studies reveal that wall hanging televisions are veryappealing to the consumers
• As prices will come down, the consumer market will develop
Our PDP Business ModelOur PDP Business Model
• We will support Philips Consumer Electronics in their ambitionsin the Plasma market
• We will do this by concentrating on the panel module assemblyand leveraging our in-house knowledge in– pixel structure simulation and addressing– digital signal processing– semiconductors
• We will purchase our parts from leading suppliers, enabling usto develop the business with limited investments and maintainflexibility.
• We will maximize value creation, while minimizing financial risk
ContentsContents
• Market Overview
• Current position
• Our future strategy– Cathode Ray Tube (CRT)– Plasma Display Panels (PDP)
• Summary
• We are number 1 in color picture tubes
• We have the power of innovation
• We constantly drive towards cost leadership
• We focus on fast growing segments
The CRT is an exciting business with growth opportunities,giving a tough time to new technologies.
Of new technologies, Plasma offers bright perspectives
SummarySummary
DisplayDisplayComponentsComponents
Philippe CombesPhilippe CombesExecutive Vice President Philips ComponentsExecutive Vice President Philips Components
CEO Business Group Display ComponentsCEO Business Group Display Components
